News and Perspectives from Pacific Gas and Electric Company

Helen Burt: It’s Time to Reevaluate Net Energy Metering for Solar Power

By Helen Burt

For more than a decade, PGE& has supported our customers who choose to enjoy the cost savings and environmental benefits that solar programs have to offer. That support has not wavered.

When customers install solar and use Net Energy Metering, they avoid paying their fair share of the electricity grid they use at night, says Helen Burt, PG&E's chief customer officer.

By the end of 2012, we had helped almost 80,000 customers install nearly 800 megawatts (MW) of new solar, about 30 percent of all the customer-installed solar in the United States — by far the most of any utility. In addition, seven of the 10 largest solar projects under construction in the world will provide electricity for PG&E customers. PG&E’s commitment to solar energy for our customers is unparalleled.

With that support also comes a responsibility: to protect customers who choose not to install solar or can’t afford solar.

That’s why it’s time for every stakeholder in California’s solar revolution to examine the current Net Energy Metering program and make sure it’s the right fit for the future.

Net Energy Metering allows electric meters to spin backward when customers produce more energy than their home or business is using at that moment. It also allows customers to essentially use the electric grid as a battery for free, storing excess energy they don’t need now to offset their usage at other times when they draw power from the grid.

Some customers even produce more energy in a year than they use, and net metering provides for financial payments for that.

While seemingly straightforward, Net Energy Metering creates challenges for other utility customers. By law, PG&E rates include charges to maintain the wires and equipment that make up the electricity grid. Other charges fund public purpose programs, such as helping low-income families pay their energy costs, and cover the costs of achieving the state’s 33-percent by 2020 renewable program.

When customers install solar and use Net Energy Metering, they avoid paying their fair share of the electricity grid they use at night and of various programs that further California’s environmental and social policies. Remaining utility customers pay for the fixed costs of the electricity grid and other programs, driving their rates higher.

From the beginning, PG&E was a proponent of Net Energy Metering, in part because it had a limited life expectancy. After a certain amount of solar was installed, the initial program would end, largely because such widespread adoption of solar would signal a thriving market that did not need further subsidy.

This plan for market transformation has been challenged by some in the solar industry who want indefinite solar subsidies. Before any utility ever reached the original net metering target, solar advocates lobbied to double net metering without regard to the cost to other customers.

Projects such as this one in west Fresno County with more than 200,000 solar panels show PG&E's commitment to solar power. (Currents Archive Photo.)

Now, under the direction of AB 2514 (which the solar industry opposed), the California Public Utilities Commission (CPUC) is studying the impacts of net metering on participating and nonparticipating customers — assessing the benefits and costs, and who exactly is paying for them. However, before the CPUC study is complete, solar advocates paid for their own study using numbers that supported their position to reach a predictable conclusion.

We support solar and want to continue to support our customers’ choice to install solar systems. But the solar industry has matured enough today to stand on its own without continued and substantial customer subsidies.

That’s why PG&E is working with the CPUC and Legislature to find solutions for customer solar installations that mitigate or eliminate these cross-subsidies from nonsolar customers to others. We hope to find solutions that will allow both the solar industry and all of our customers to thrive.